Diverxity Payout Model

Revised : August 2017

Diverxity has a unique
payout model that distributes the majority of subscriber revenues back out to
the community's content creators. It's a little complicated admittedly, but
it's all in the interest of fairness! Our model has been specifically designed
to reward content providers proportionally to how people consume their content.
Additionally, funds are allocated to incentivize new content to be brought into
the community. This document details how those distributions are calculated.

DISTRIBUTION OF SUBSCRIBER FUNDS

Calculation methodology:

A subscriber pays their monthly subscription fee. The credit card processing company takes a portion of the
billed amount (currently around 15% - and yes we think that's very high too, but there are limited choices for
companies offering anything "adult" unfortunately). The remainder is considered Net Subscription Revenue.

Of the subscriber's Net Subscription Revenue

67% to be distributed to content creators – this is the “Content Distribution”

25% is retained by Diverxity

8% is paid out to the subscriber’s referral FriendTree.

The Content Distribution is then split into two “buckets”:

50% Views Bucket - We track the subscriber’s consumption of content on the site and proportionally allocate
the views bucket amount across the content items viewed. So if for example a subscriber viewed 10 content items,
each of the items would get 10% each of the bucket.

50% Viewing Bucket - We track the subscriber’s consumption of content on the site and proportionally allocate
the viewing bucket amount across the content items viewed. So if for example a subscriber watched a video for 5
minutes of a video, and then looked at 5 photosets for a minute each, the video would be allocated 50% of this bucket and
each of the photosets would get 10% each of the bucket.

After all of the above calculations, various content items will have been allocated a certain amount of money.
For each content item, the earnings are divided up as per agreed by the producers and talent contributing to the item.
The default splits (per item) are as follows:

50% Talent (in aggregate if more than one performer)

50% Artists/Producers (in aggregate)

Once earnings are calculated for all talent and artists, referral commissions are paid up that members FriendTree.

Earnings from all distribution mechanisms are then posted to the individual users' accounts.

DISTRIBUTION OF CONTENT ACCESS OR DOWNLOAD PURCHASE FUNDS

Members can purchase access to content, or the ability to download content, with DXUs - the amount is set by the owner of the content.

Of the DXUs collected from any purchases:

95% is distributed to content team members according to splits

5% is retained by Diverxity

Once earnings are calculated for all talent and artists, referral commissions are paid up that members FriendTree.

Earnings from all distribution mechanisms are then posted to the individual users' accounts.

EARNINGS FROM "LOVE" GIVEN

Members can give direct monetary gifts of DXUs to other
members, content sets, or posts. We call these gifts "Love". The full amount of
all Love given is credited to the recipient's account. In the case of Love
given to content sets, the Love DXUs will be distributed according to the same
percentage splits amongst the team as subscriber earnings. In all cases, there
are no deductions to the amounts by Diverxity.

MONTHLY INCENTIVE EARNINGS

In addition to distributing all subscriber funds, we currently also incentivize
participation by injecting money into the system each month. The purpose of
this is to 1) encourage active publishing by ensuring that all publishers will
receive something, even if a small amount, and to compensate for viewing of
content by artists and talent and also viewings of teaser content by non-paying
fans. The monthly incentive amount is currently $500, and is distributed as
follows:

$150 is distributed equally amongst active members who published new content that month. This includes all artists and talent in the content, excluding inactive users.

$50 is allocated proportionally to content viewing minutes in the past month.

$50 is distributed according to the proportional number of views of each live content set. Note this is views, as opposed to minutes viewed.

The reason to calculate based on views as well as viewing minutes is to maintain fairness between publishers of videos and publishers of photos. Video tends to naturally have longer viewing durations and we wanted to more fairly reflect the popularity of photosets. By incentivizing on views, in addition to viewing minutes, we feel if more fairly reflects the community's appreciation of content sets.

REFERRAL EARNINGS - FriendTree

In order to reward members, both PROs and fans, for bringing
new members into the community, we created FriendTree, our network marketing
program. You gain referrals by inviting people to check out Diverxity with your
personal referral code links. Your links can be found on this page:
https://www.diverxity.com/settings/user/social

When a fan you refer decides to subscribe, or when a PRO you
refer earns money from their content you generate referral earnings. This
program is "multi-level", so you will get referral earnings from members that
are brought in by members that you have referred.
A total of 8% referral earnings is paid out as follows:

4% to whoever referred the member (Level 1)

2% to whoever referred the Level 1 member (Level 2)

1% to whoever referred the Level 2 member (Level 3)

0.5% to whoever referred the Level 3 member (Level 4)

Payouts continue up each members FriendTree, each level half the payout % of the previous level

PAYOUT ELIGIBILITY AND REQUESTING A PAYOUT

Users may request a payout (via check or other payment means
as they become available) if they have a balance exceeding the minimum payout
threshold of 100 DXUs or $20USD or more at no charge.

Your DXU balance can be found in the top bar of the website
at most times. When you click on that button, it presents you with your
balance, last payout information, and if you are eligible for a payout it shows
a button to request a payout. Pressing this button will submit your payout
request and will start the process of getting paid.

In order to receive a payout, you are required to provide a
IRS Form W-9 if you are a citizen of the United States, or a W-8BEN if you are
not. You may send the appropriate form (blanks found at https://www.irs.gov/) to
support@diverxity.com
in advance of requesting a payout, or a Diverxity representative will contact you after
initiating the payout process to get the form from you.

If the user would like a payout issued when their balance is
less than $20USD, a $2 processing fee will be deducted from the payment. In
order to request such a payment, you will need to send a request to
support@diverxity.com.

All earnings are subject to a maximum holding period of 60
days, so that any credit card chargebacks or other adjustments can be
processed. No more than one payment in any thirty (30) day period shall be made.

NOTICE:
The methodology and amounts indicated in this document are subject to change. The date of latest revision will
always be marked at the top of this page. Content creators will be notified by email in advance of any changes.